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Obamacare…Gifts

Welcome to ObamaWorld. Health insurance premiums—which President Barack Obama has been promising for the last three years will be going down, courtesy of his Obamacare—are about to jump up. High. The AP is reporting that we can look forward to 20%-100% premium jumps beginning in just nine months—next January. Here’s what some of those increases will look like, with my editorial comments interspersed.

Changes to how insurers set premiums according to age and gender could cause some premiums to rise as much as 50 percent, according to America’s Health Insurance Plans. NOTE: this is because Obamacare drives insurers steadily away from market-oriented, risk-based premiums. Age and gender drive differing risks for a given insured malady. As the AP went on:

The law will prohibit insurers from setting different rates based on gender—something they currently do because women generally use more health care. That means premiums for some men could rise, while they fall for women. NOTE: this is a redistribution, and a subsidy of one group (here, women) by another.

Young people who currently have low-cost coverage may see some of the biggest hikes. NOTE: or they may start out with no coverage at all, because they don’t need it.

In many states, insurers charge a 60-year-old customer $5 in premiums for every $1 they collect from a 24-year-old. The logic behind that is that older people use health care more and generate more expensive claims than younger customers, so insurers need to collect more to help pay their bills. … But the overhaul will narrow that ratio to 3-to-1. That alone could cause the premium for a 24-year-old who pays $1,200 annually to jump to $1,800, according to AHIP. Meanwhile, the 60-year-old who currently pays $6,000 will see a 10 percent drop in price. NOTE: This is naked wealth redistribution and a subsidy. Only this time, the victim has no wealth to redistribute—the 24-year-old is only just starting out.

Prices also may change depending on a person’s current coverage. Many policies on the individual market (coverage not sold through employers) exclude maternity coverage, but that will be considered an essential health benefit under the overhaul. That could mean higher prices for some.

Vikki Swanson, 49, of Newport Beach, CA, resents that the added benefit may lead to higher costs for her. “I had a hysterectomy, I have no need for maternity coverage, but I have to now pay for it. I have to pay not only my own premium but I have to subsidize everybody else[.]” NOTE: Yeah….

A new tax on premiums could raise prices as much as 2.3% in 2014 and more in subsequent years, according to a study commissioned by AHIP. Policyholders with plans that end in 2014 probably have already seen an impact from this. NOTE: this tax on the top-line revenues of medical equipment manufacturers will suppress development and/or production of items ranging from pacemakers to suits that let paraplegics walk again.

Requirements that insurance plans in many cases cover more health care or pay a greater share of a patient’s bill than they do now also could add to premiums, depending on the extent of a person’s current coverage, according AHIP. NOTE: because insurance companieswelfare agencies aren’t allowed to charge for elective items like contraceptives, they’ll have to recoup these losses from other areas.